The pressure is on for law firms to finalise discounted rates for the Royal Bank of Scotland’s (RBS) cost-cutting review of its legal services before making their bids in a controversial online auction.
The bank’s legal spend is estimated to be in the region of £40m a year, although RBS would not confirm this figure.
The bank is breaking with previous convention by dividing all transactional work into lot sizes. The divisions, covering all corporate banking and financial markets work, are £0-£10m, £10m-£50m, £50m-100m and £100m-plus. Firms must bid on hourly rates rather than on a fixed or scale fee basis. A separate panel will cover non-transactional work, such as employment, litigation and regulatory.
RBS has pre-selected firms for particular lots, but is also allowing them to choose a limited number of other lot sizes or areas when posting their bids on the secured website.
One partner close to the process said: “It’s all a bit like eBay.” Another source said that firms were unclear as to whether successful firms would be guaranteed a certain share of work, or whether individual relationships would still play an important part in work allocation.